Claymore Delta Global Shipping ETF (SEA)

[tootalljones]

https://www.bloomberg.com/quote/BDIY:IND

[tootalljones]

is global shipping still collapsing? which is what it did in the GFC; it was vaporized

[benfrankledger]

That’s what I? think tailwinds are showing. Been so tough but it seems to be stepping up.

[MWM]

Time to bring the whole sector off of life support hopefully!

[benfrankledger]

The Baltic Dry Index at 1588 is at the highest level since March 2014 as are many base metals prices.

The demand for shipping commodities from points of production to consumption is telling us that while China has been a major buyer of raw materials over recent months, the phenomenon is not limited to the Asian nation.

The BDI is an economic indicator, and in many ways, it is an inflationary gauge. While the U.S. Fed probably does not monitor freight rates when making inflation projections, they should as the index provides insight into the demand for the commodities that often are the best indicators of inflationary pressures on the global economy.

[MWM]

SEA might be one to watch here...

[frenchee]

Why Shipping ETFs Could Sink or Swim

February 05, 2009 at 1:00 am by Tom Lydon

Container shippers are continuing on a trend all their own, but during the global slowdown many question if they are adding to their own demise, and compromising the performance of related exchange traded funds (ETFs).

Low Prices. The shipping industry at large could add to their own destruction as smaller companies get pushed out and global trade weakens. The idea is to keep the freight rates down until 2010, spurring trade business and keeping shipping part suppliers and products in business. John W. Miller for The Wall Street Journal reports that these large vessels are as big as a football field and carry things ranging from electronics to produce to automobiles.

Global Trade Drop. Shippers are eager to fill their vessels full with cargo, so in an effort to do so, they offer lower rates than usual. With overcapacity and a drop in trade, the bottom recently fell out on shipping rates. The rate for shipping a container from Asia to Europe has fallen to around $300, one-tenth the cost of a year ago, even as some shippers cancel regular runs; some ships will even take cargo for free.

The shipping industry runs the risk of running themselves underwater, so to speak, if the shipping industry cannot support the smaller players and continue to fuel business.

[frenchee]

Shipping rates hit zero as trade sinks

#msg-34828342

[clairmontasap]

thx

[frenchee]

For SEA, see iBox. For BDI, it's http://www.wikinvest.com/stock/Baltic_Dry_Index_-_BDI_(BALDRY)

[frenchee]

looks like SEA is headed back to 9.35...

[clairmontasap]

that is interesting

is there a list of the components?

[frenchee]

SEA has been outperforming the BDI since mid Oct 08. Will be interesting to see if that relationship holds.

[clairmontasap]

BDI up...yet shippers down today...:

http://www.bloomberg.com/apps/quote?ticker=BDIY%3AIND

[frenchee]

SEA back into the wedge...

[Market Technician]

keep your eye on the dollar, Europe and Japan devaluing their currencies lately

[frenchee]

BDI and WTIC seem to be turning the corner...

[Market Technician]

hard to say, depends on $BDI and $WTIC, my chart was made before the crude pop, mideast/russian tension.

[frenchee]

SEA broke the upper trend line in its wedge pattern today on the daily chart. Looks like it might have some legs.

[frenchee]

Next SEA target is the upper Bollinger Band on the daily chart. Looks like a short-term bottom is in...

[Market Technician]

sea chart
back to eight; $8.11 is 78% fib, $3.80 is 161% fib. Ultimately, it's on its way to $7, then probably below $5 within a month or so.

[ETFMonster]

Hi shake,

Think the trendline support will hold for SEA? Or does it fall back to eight?

[frenchee]

Unless it gets a sell off in the last hour, SEA has broken the intermediate-term down trend line. See iBox charts.

Looks like next significant target is its 50-day MA...

[frenchee]

Thanks for the link MT...

[Market Technician]

http://shipping.capitallink.com/

Nice charts here frenchee, has Baltic Dry Index, but one must sign up to login (free)... I particularly like their market summaries... every shipping company you can think of is here w/ their respective pages, charts, news, etcetera.

enjoy :)


drys page: http://shipping.capitallink.com/company/stock_chart.html?ticker=DRYS

[frenchee]

Weekly Baltic Dry Index Chart

[Trueheart]

Frenchee, thanks for the post.

The author's argument is pretty damn well persuasive regarding the state of world economies.

Trueheart

[frenchee]

Forget unemployment. Inflation. Consumer confidence. Personal Incomes…

You can even ignore the ever-popular gross domestic product (GDP).

Most of the indicators that the market relies on to forecast the future are worthless in this type of environment. The truth is the data coming out of the traditional economic indicators isn’t current. By the time it’s being reported, the information is already weeks or even months old.

If you want to know when the global slowdown that’s erased $28 trillion in wealth (so far) will finally reverse course, pay attention to the obscure Baltic Dry Index. And nothing else. Here’s why…

What Is The Baltic Dry Index?

Despite the name, the Baltic Dry Index has nothing to do with markets in Lithuania, Latvia or Estonia. Instead, it’s all about the cost of shipping major raw materials. Like iron ore, coal, grain, cement, copper, sand and gravel, fertilizer, even plastic granules.

The value for the index is determined by the London-based Baltic Exchange, which traces its origins back to 1744. Each day, the exchange canvasses hundreds of brokers around the world for price quotes on moving goods. For instance: Shipping 100,000 tons of coal from South Africa to Japan, or 50,000 tons of iron ore from Australia to China. It then aggregates the quotes to form the Baltic Dry Index.

Basic economic principles of supply and demand explain the significance of the index…

The supply of cargo ships is tight and inelastic. It takes roughly two years to build a new cargo ship. And the high cost of each prohibits docking ships during slow periods. In other words, a change in cargo rates does not change the number of ships in operation. So even the slightest changes in demand for shipping raw materials results in a change in the index.

And because the index tracks the cost of shipping raw materials - the precursors of economic output - instead of intermediate or finished goods, it provides a precise and rare measurement of the volume of global trade at the earliest possible stage.

A sharp move up, means global trade is increasing. Conversely, a sharp move down, means it’s decreasing. Since global economic activity ultimately influences the equity markets, sharp moves in the Baltic Dry Index often predict and precede similar moves in the equity markets.

4 Reasons to Favor The Baltic Dry Index

Of course, there are other reasons to favor the Baltic Dry Index over other leading indicators, including:

No room for speculation. The index is not tradable, which means the only people booking cargo ships are those with actual cargo to ship. That makes the Baltic Dry Index, as economist Howard Simons put it, “totally devoid of speculative content.”
Not subject to revisions. Unlike almost every other piece of economic data, the Baltic Dry Index is not revised on a monthly or quarterly basis. The price is the price. And it’s completely reliable.

An inability to be manipulated. Governments, both here and abroad, love to “massage” economic data, especially inflation figures. Obviously, it’s difficult to base investment decisions off incomplete or “mostly” accurate data. But because of the way the Baltic Dry Index is measured, that’s simply not possible. Again, the price is the price. And it’s completely reliable.

Real-time, daily updates. We all know markets shift fast. And in turn, we need indicators able to reflect those sudden movements. At best, we only get weekly updates for other leading indicators. And all are backward looking. The Baltic Dry Index represents the only indicator with “real-time” updates. And such frequency dramatically increases its relevancy and value.

In light of the above, it doesn’t take a market maven to predict what direction the index’s been heading lately - practically straight down. Here’s the thing. The Baltic Dry Index started plummeting in early June, before the global equity markets went into a tailspin, proving its predictive abilities.

So if you’re looking for a clear indication of a market bottom, forget about any other leading indicator or popular convention. Just look for the Baltic Dry Index to start trending noticeably higher.

Good investing,

Lou Basenese




Source: The Baltic Dry Index: The Only Economic Indicator Worth Tracking Right Now

[frenchee]

Great break of the down trend line today. Looks like a short-term bottom is in...

[frenchee]

down trend line broken today on the daily charts...

[frenchee]

60-minute Renko chart went on a buy yesterday...see iBox...

[frenchee]

Biggest Bubble of Them All' Is Globalization: Chart of the Day

By Michael Patterson

Oct. 24 (Bloomberg) -- The 90 percent tumble in the global benchmark for commodity shipping costs since May exceeded the Dow Jones Industrial Average's plunge during the Great Depression, signaling globalization is ``the biggest bubble of them all,'' Bespoke Investment Group LLC said.

The CHART OF THE DAY shows the rise and fall of the Baltic Dry Index, a measure of freight costs on international trade routes, along with three other bubbles during the past decade identified by Bespoke: The Nasdaq Composite Index of technology stocks, the Standard & Poor's Supercomposite Homebuilding Index and the CSI 300 Index, a benchmark for Chinese equities.

The Baltic Dry Index's drop from its peak just five months ago surpassed all of those, along with the Dow's 89 percent retreat from 1929 to 1932, according to Bespoke.

``The Baltic Dry Index had a meteoric run since the start of the decade, as it became one of the key symbols of the `globalization' trade,'' Paul Hickey, co-founder of the Harrison, New York-based research and money management firm, wrote in a report yesterday. ``It now appears that like any `new thing,' the globalization trade went too far.''

The Baltic Dry Index fell yesterday for a 14th straight session as the freeze in money markets curbed traders' ability to buy cargo on credit.

The Nasdaq plunged 78 percent from 2000 to 2002 as investors concluded high-priced Internet stocks weren't supported by profits. The S&P index of homebuilder shares has dropped 82 percent from its 2005 peak as the U.S. suffers its worst housing slump since the 1930s. China's shares have fallen in the past year as slowing economic growth and new regulations prompted traders to shun stocks that had climbed to the most expensive valuations among the world's 20 biggest markets.

[frenchee]

Dry Bulk Shippers Foundering


http://www.forbes.com/2008/10/22/dry-bulk-dryships-markets-equity-cx_ra_1022markets46.html?feed=rss_popstories

[frenchee]

New iBox for this relatively new global shipping ETF...